PSX rebounds on strong economic data despite geopolitical risks 

The Pakistan Stock Exchange (PSX) moved higher on Friday as investors shrugged off regional escalation and responded positively to record remittance inflows, lower weekly inflation, and renewed trade engagement with the United States, helping the benchmark index recover from recent volatility.

According to the PSX website, the market opened on a positive note, with the benchmark KSE-100 Index gaining more than 1,700 points in the opening minutes of trading. The rally strengthened as the session progressed, pushing the index to an intraday high of 183,477.57, up 2,217 points from the previous close. 

At 2:42 pm, the KSE-100 Index was hovering at 183,037.06, up by 1777.39 points, or 0.98% from the previous close. 

Buying was broad-based, with gains in automobile assemblers, cement, commercial banks, fertiliser, oil and gas exploration companies, oil marketing companies and power generation. 

Market sentiment was supported by SBP data showing workers’ remittances reached a record $41.6 billion in FY2025-26, up 8.6% from $38.3 billion a year earlier.

Weekly inflation also eased by 0.45% during the seven days ended July 9. The Sensitive Price Indicator, however, remained 11.94% higher than a year earlier.

Investors were also monitoring two-day trade talks between Pakistan and the United States in Washington, where Islamabad is seeking tariff relief and progress towards a broader bilateral trade agreement.

The positive domestic indicators came alongside a weaker economic outlook. The IMF retained Pakistan’s growth forecast at 3.5% for the new fiscal year and warned that renewed Middle East conflict could raise commodity prices, disrupt supply chains and tighten financial conditions.

The Asian Development Bank also cut Pakistan’s FY2027 growth forecast to 3.7% from 4.5% and raised its inflation projection, citing higher food and fuel costs, global energy market disruption and possible pressure on remittances. The government has set a 4% growth target for the year.

Separately, the Economic Affairs Division warned that a fresh escalation in the Gulf could increase Pakistan’s energy costs, inflation and external financing needs while slowing economic growth.

Today’s rebound followed a volatile session on Thursday, when selective buying helped the market recover most early losses after Wednesday’s sharp sell-off. The KSE-100 Index closed Thursday at 181,259.68 points, down 369.69 points, or 0.20%.

Global stocks rose on Friday despite a more ​muted European open, as AI-related enthusiasm in Asia over the market debut of South Korean chip bellwether SK Hynix led investors to brush off tit-for-tat attacks ‌between the U.S. and Iran.

While the renewed back-and-forth attacks have further eroded the fragile three-week-old U.S.-Iran ceasefire, markets have mostly taken developments in the Middle East in their stride, although oil prices and their inflationary impact are back on investors' radar.

European shares were muted on Friday, with the pan-European STOXX 600 up 0.1%, remaining on track ⁠for a weekly loss that could snap a four-week winning streak.

In Asia, Japan's Nikkei closed 1.2% higher, while South Korea's KOSPI, the epicentre of the AI rally, ended with ​gains of more than 2.5%, only a few sessions after Wednesday's dramatic 5% drop that put the index in bear territory.

Overnight, the tech-heavy Nasdaq ended sharply higher after Micron Technology's plans to invest more than $250 billion in the U.S. through 2035 buoyed chip stocks, with the Philadelphia SE ‌Semiconductor Index rising ⁠3%.

Oil prices eased on Friday but remained on ‌track for weekly gains as renewed U.S.-Iran fighting disrupted shipping in the Strait of Hormuz, stoking concerns over supply disruptions.

Brent futures were down 68 cents, or 0.9%, at $75.62 a barrel by 0817 GMT. U.S. West Texas Intermediate (WTI) crude ​dropped 64 cents, or 0.9%, to $71.44.